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Will EV Charging be the Next Wi-fi?

Alexander is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

When you go to a hotel today, especially an upscale one, you would expect it to offer wi-fi. Today's business travelers require Internet access to get their work done and even leisure travelers expect wi-fi to look up local attractions or stay connected with family and friends.

Hotels today have responded to their customers' needs and have nearly universally adopted some form of wi-fi. But with the rise of a new technology, will hotels move to adapt to a new type of customer?

Charging an EV

Right now, if you drove an electric car to most hotels and asked to plug it in, the answer would almost certainly be no. Maybe if you have a first floor room you could run a charging cable out your window to your car, but this would be both cumbersome and dangerous, not to mention a good way to get talked to by hotel staff.

Demand is key

A friend of mine noted that with an increase in the number of EVs, hotels may begin to offer guests the ability to recharge their cars. However, right now the fact is there are simply not enough electric cars on the roads to make hotel owners feel it is worth adding charging capabilities.  Putting up a feature of EV Charging on a hotel's website is only going to attract a very select group of EV driving customers. But wi-fi is able to attract a far wider segment of customers so it has become commonplace at hotels both here and abroad.

As customers have become more tech savvy, company like Boingo (NASDAQ: WIFI) have been installing wi-fi systems in everything from stadiums to hotels. Boingo already has well over half a million hotspots and is expecting to continue adding more. The success of Boingo and the introduction of wi-fi in hotels is a perfect example of how if customers demand it, hotels will offer it.

Customers will demand it

An EV for the masses used to just be a dream of the mechanical savvy and environmentally conscious. But today's EVs are changing that image. General Motors' (NYSE: GM) Chevrolet Volt has brought the middle class an electric car it can afford. With a starting price near $30k after tax rebate, this four-seater is a prime candidate for families looking to replace their Prius or just cut fuel consumption.

But one cannot mention electric cars without Tesla Motors (NASDAQ: TSLA). The automaker has already taken well over 10,000 reservations for its $50,000 Model S and has over 2,000 for its Model X, which has not even entered production. The number of Teslas on the roads right is not enough to move hotels toward adding EV charging but with that number expected to quickly grow over the next several years, hotels may begin to feel the pressure.

Hotels will offer it

For hotels, the actual cost of providing the electricity to charge an electric car is fairly minimal. Even at $0.15 per kwh, a full recharge of a completely drained 85 kwh Tesla Model S battery pack would only be around $10. Furthermore, Tesla's cars tend to reach a higher income segment, a group of customers more likely to be willing to pay a $10 charging fee.

The question would then become how hotels would offer their charging. The table below shows some of the options for charging a Model S.

<table> <tbody> <tr> <td>Type of Charger</td> <td>Miles of range per<br />hour of charging</td> <td>Equipment required for hotel</td> </tr> <tr> <td>110 V Standard Outlet</td> <td>5</td> <td>Standard outlet, owner supplies mobile connector</td> </tr> <tr> <td>240 V RV/Campsite Outlet</td> <td>31</td> <td>240 V outlet, owner supplies mobile connector</td> </tr> <tr> <td>Tesla High Power Wall Connector</td> <td>62</td> <td>240 V outlet, Tesla high power wall connector installed in hotel</td> </tr> <tr> <td>Tesla Supercharger</td> <td>300</td> <td>Full Tesla Supercharging System</td> </tr> </tbody> </table>

Source: Teslamotors.com

Hotels may take different approaches with regards to charging. While most customers would prefer for their car to be fully charged by the time they leave, some customers may expect to have enough charge in their car to enjoy the nightlife of the area. Ultimately, this may come down to a pay by speed concept, as with wi-fi connection speed at some hotels, or hotels may compete in offering faster charging than their competitors making charging speed yet another way to compare hotels.

Dynamic hotels

With a never before seen number of EVs on the roads, demand for charging such vehicles is likely to skyrocket. While many owners will plug their cars in at home, travelers who use their EV will demand overnight charging outside the network of Tesla's Supercharging stations. Due to the relatively low cost of electricity in comparison to the overall hotel costs, meeting this customer demand is likely to become a priority of hotels over the next several years. And in a decade, we may come to expect EV charging as we would wi-fi.

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